Losing your spouse is a painful, confusing time, but add to that repeated calls from an aggressive debt collector, and a bad situation suddenly can get even worse. Before you cave into the pressure, take a moment to catch your breath and learn the facts about your rights and responsibilities. You may be off the hook as some debts — including even certain types of credit card charges — are forgiven at death. However, others linger much longer.
First off, you should know that you are generally not personally responsible for paying off your husband's debts, as any loans would normally be paid off by his estate. This includes credit card debt, student loans, car loans, mortgages and business loans.
According to Marc Zimmerman, trust and estate planning attorney with the Law Offices of Michael A. Zimmerman, "When your husband dies owing a debt, the debt does not go away. Generally, the estate is liable for paying any outstanding debts, and, the named personal representative, executor or administrator will pay debts owed from the money in the estate, not from their own money or that of the surviving spouse. However, if the surviving spouse inherits certain assets from the deceased spouse through beneficiary designations or joint account ownership, and the estate assets are insufficient to satisfy the creditor claims, the creditors could attempt to make claims against those assets that pass directly to the surviving spouse outside of the probate estate.”
Sign up for Kiplinger’s Free E-Newsletters
Profit and prosper with the best of expert advice on investing, taxes, retirement, personal finance and more - straight to your e-mail.
Profit and prosper with the best of expert advice - straight to your e-mail.
That being said, you may be responsible for certain types of debts. For example, if the debt is jointly owned or you have co-signed a loan, you are obligated to continue to pay this debt. This occurs most often with credit cards, car loans or mortgages. Some states also require you to pay off any medical bills that your spouse incurred before their death.
The State You Live in Can Make a Big Difference
It is essential to understand the laws of your state so that you know where you stand concerning all debts, as some community property states hold you responsible for the debt even if it is not in your name. Community property laws make both spouses equally liable for debts incurred after the marriage has taken place.
There are currently nine community-property states:
- Arizona
- California
- Idaho
- Louisiana
- Nevada
- New Mexico
- Texas
- Washington
- Wisconsin
A Word about Credit Cards
It is important to note that there is a distinction between joint account holders and authorized users with credit card debts. As a joint account holder, you would need to continue to pay off the credit card (no matter what state you live in) because you and your spouse are both considered owners of the account. That means you share equally in the ownership of any charges that are on the card.
On the other hand, authorized user status means that you have charging privileges on your spouse’s card, but you are not considered an account owner. So, if your spouse were to pass away, you wouldn’t be responsible for paying the debt they incurred as an authorized user. The exception would be if you lived in a community-property state, which requires the surviving spouse to pay off all debts, including those in just her husband's name.
Does Not Paying His Debt Impact My Credit Score?
Generally, your credit score would not be hurt by any of your spouse’s outstanding loans that you are not required to repay. According to Davon Barrett, who is a CERTIFIED FINANCIAL PLANNER™ professional specializing in working with widows at Francis Financial, "If the debt is solely in the name of your husband, the debt collector should not report any late or non-payment to the credit bureaus in your name." The exceptions to this will be if you are a joint account owner, co-signer or reside in one of the nine community-property states listed above.
Barrett cautions widows, "Some debt collectors are inappropriately aggressive. For example, if the debt collector insists that you are responsible for the account balance, but you believe you are not, you may request that the collector provide evidence."
Talking to an estate-planning attorney can help you understand under which circumstances you have an obligation to pay and when you do not. Zimmerman shares that “the best way to find an experienced estate planning attorney is to get a referral from another attorney, financial adviser or accountant whom you know. This professional should be able to introduce you to an excellent trust and estate planning attorney who specializes in this area of the law.”
Plan appropriately and include this in your financial plan. Consider talking to a financial adviser about how debt might affect your overall financial plan and goals. If you don’t have a financial adviser yet, finding one is not difficult. Reach out to your friends and family for a referral to a fee-only, fiduciary, independent financial adviser.
-
Is Your Social Security Earnings Record Wrong? Here's How to Fix ItYour Social Security benefits are based on your Social Security earnings record. It's important to review your records to avoid having your benefits reduced.
-
Stock Market Today: Markets Discount Another U.S. DowngradeAfter Friday's closing bell, Moody's followed Standard & Poor's and Fitch and cut its rating on U.S. government debt.
-
Donating Complex Assets Doesn't Have to Be ComplicatedIf you're looking to donate less-conventional assets but don't know where to start, this charity executive has answers, such as considering a donor-advised fund (DAF) for its tax benefits and ease of use.
-
Think a Repeal of the Estate Tax Wouldn't Affect You? WrongThe wording of any law that repeals or otherwise changes the federal estate tax could have an impact on all of us. Here's what you need to know, courtesy of an estate planning and tax attorney.
-
In Your 50s? We Need to Talk About Long-Term CareMany people don't like thinking about long-term care, but most people will need it. This financial professional recommends planning for these costs as early as possible to avoid stress later.
-
Social Security Pop Quiz: Are You Among the 89% of Americans Who'd Fail?Shockingly few people have any clue what their Social Security benefits could be. This financial adviser notes it's essential to understand that info and when it might be best to access your benefits.
-
Such Attractive Yields in High-Grade Munis Are Rare and May Not Last LongAccording to this munis expert, the last time munis were this cheap was a brief period in 2023. If you kicked yourself for missing out then, you have a second chance now.
-
Financial Analyst Sees a Bright Present for Municipal Bond InvestorsHigh-tax-bracket investors have an excellent opportunity to secure low-volatility, high-quality returns at yield levels rarely seen in over a decade.
-
I'm an Insurance Pro: How Not to Get Dumped by Your Insurance AgentYour insurance agent or broker might show you the door if you do any of these five things. Being a good customer is about more than paying your bill on time.
-
Two Estate Planning Issues You Should Never OverlookThis estate planning attorney explains why proper asset titling and beneficiary designations make a big difference when it's time to transfer your wealth.
